AFRICA MONEY-Angolans build stakes in Lisbon to profit in Luanda

LISBON Nov 29 For most investors, buying
distressed bank stocks in a recession-hit Euro zone economy may
sound like a bad idea.

Angolan investors in Portugal's banks certainly do not think
so, having built up hefty stakes in lenders that are also key
players back at home in Luanda - where the booming banking
sector is quickly luring international competition.

Portugal's banks may not look too appealing as they
desperately seek capital in a bailed-out country, but their
units in former colony Angola have made them attractive to
high-profile investors from Africa's second-biggest oil
producer.

Armed with capital from an economic boom, Angolan state oil
firm Sonangol last month raised its stake in Millennium BCP
to 15.08 percent, confirming its status as the top
stakeholder in Portugal's largest listed bank by assets.

Part of the rationale is to invest profits from an economy
that is set to grow 8 percent in 2012, with oil output expected
to keep expansion strong in the next few years.

"Because Angola has capital, it makes sense to invest
overseas, but it is unusual, as not that many African countries
invest in European companies," said Victor Lopes, economist for
Sub-Saharan Africa at Standard Chartered.

INFLUENCE AT BARGAIN PRICES

Rock-bottom prices in Portugal's stock market add to the
rationale. Banking shares have trading near historic lows this
year, pressured by a liquidity squeeze and austerity under the
country's 78-billion-euro ($101 billion)international bailout.

Linguistic and cultural ties, still strong nearly four
decades after Angola's independence, also help.

But the underlying logic is to gain exposure to the units
built by the Portuguese banks over the last decade in Angola's
high-potential banking market.

"The sector continues to show innumerable opportunities for
growth, shown by a banking penetration level with just 22
percent of Angolans holding bank accounts," global auditing firm
KPMG said in a study published this week.

The study showed that total assets in the sector grew over
20 percent in 2011, with deposits jumping by more than a third
and loans to clients rising 23 percent.

BPI's Angolan unit, BFA, is among the five banks that
control around 80 percent of the market, while Millennium Angola
is slightly smaller but also posting strong growth.

"For Angolan investors it is clearly interesting to have
stakes in Portuguese companies that are heavily involved in
Angola," Standard Chartered's Lopes said. "It gives them a say,
influence in sectors at home - that is a key factor."

The increase in influence was seen when Sonangol oversaw a
management change at BCP in January. Manuel Vicente, then
Sonangol CEO and now Angola's vice-president, said the new cycle
would "add value to the Angolan and Portuguese companies".

The Angolan government has forced overseas banks to sell up
to 49 percent of their units to local partners, paving the way
for Sonangol and Isabel dos Santos to buy large minority stakes
in Millennium Angola and BFA in a country which does not yet
have a stock market.

With the Angolan financial sector so promising, further
competition from abroad is rising, with Africa's largest lender,
Standard Bank, implementing a rapid expansion plan and
several foreign players waiting for licences.

FULL SHOPPING CART - OIL, TV, SUPERMARKETS

The Angolan investors' strategy is not restricted to banks.

Sonangol has long expressed its desire to transform its
indirect stake in Portuguese oil and gas firm Galp,
which has stakes in Angolan oil blocks, into a direct holding.
It is widely expected to reach this goal as Italy's Eni
sells down its stake.

Isabel dos Santos was on Tuesday appointed to the board of
Zon Multimedia, Portugal's leading cable TV provider,
in which she has built a stake of 28.8 percent.

The operator's Angolan venture, ZAP, launched three years
ago, has signed 400,000 subscribers to provide tough competition
to South Africa's Multi-Choice network. Analysts at Barclays
said ZAP could reach a million customers in three years.

Dos Santos has also partnered with Portuguese conglomerate
Sonae to open five hypermarkets in Luanda. With
Angola's growth seen leading to the creation of a middle class,
food retail is another hot prospect, attracting investment from
Africa's biggest grocer, Shoprite.

"As Angola is opening its economy to foreign investment, our
bigger companies and investors have turned abroad because this
can give know-how in key sectors," said a senior source in the
financial sector, who asked not to be named. "They have to
invest overseas to be stronger back at home."
($1 = 0.7746 euros)
(Reporting by Shrikesh Laxmidas and Sergio Goncalves; editing
by Ron Askew)

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